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Chapter 15-20 Marketing

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Promotion
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communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response
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promotion strategy
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a plan for the optimal use of the elements of promotion: advertising, public relations, personal selling, sales promotion, and social media
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competitive advantage
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one or more unique aspects of an organization that cause target consumers to patronize that firm rather than competitors
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communication
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the process by which we exchange or share meaning through a common set of symbols
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interpersonal communication
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direct, face to face communication between two or more people
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mass communication
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the communication of a concept or message to large audiences
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sender
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the originator of the message in the communication process
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encoding
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the conversion of sender’s ideas and thoughts into a message, usually in the form of words or signs
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channel
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a medium of communication such as a voice, radio, or newspaper for transmitting a message
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noise
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anything that interfers with, disorts or slows down the transmission of information
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receiver
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the person who decodes a message
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decoding
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interpretation of the language and symbols sent by the source through a channel
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feedback
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the receiver’s response to a message
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promotion mix
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the combination of promotional tools including advertising, public relations, persona selling, sales, promotion and social media used to reach the target market and fulfill the organization’s overall goals
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advertising
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impersonal, one way mass communication about a product or organization that is paid for by a marketer
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public relations
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the marketing function that evaluates public attitudes, identifies areas within the organization the public may be interested in, and executes a program of action to earn public understanding and acceptance
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publicity
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public information about a company, product, service, or issue appearing in the mass media as a new item
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sales promotion
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marketing activities other than personal selling, advertising, and public relations that stimulate consumer buying and dealer effectiveness
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personal selling
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a purchase situation involving a personal, paid for communication between two people in an attempt to influence each other
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paid media
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a category of promotional tactic based on the traditional advertising model, whereby a brand pays for media space
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earned media
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a category of promotional tactic based on a public relations or publicity model that gets customers talking about products or services
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owned media
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a new category of promotional tactic based on brands becoming publishers of their own content in order to maximize the brands value to customers
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AIDA concept
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a model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message; the acronym stands for attention, interest, desire, and action
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Integrated marketing communications (IMC)
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the careful coordination of all promotional messages for a product or a service to ensure the consistency of messages at every contact point at which a company meets the consumer
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push strategy
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a marketing strategy that uses aggressive personal selling and trade advertising to convince a wholesaler or a retailer to carry and sell particular mechandise
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pull strategy
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a marketing strategy that stimulates consumer demand to obtain product distribution
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advertising response function
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a phenomenon in which spending for advertising and sales promotion for advertising and sales promotion increases sales or market share up to a certain level but then produces diminishing returns
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institutional advertising
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a form of advertising designed to enhance a company’s image rather than promote a particular product
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product advertising
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a form of advertising that touts the benefits of a specific good or service
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advocacy advertising
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a form of advertising designed to stimulate primary demand for a new product or product category
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pioneering advertising
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a form of advertising designed to influence demand for a specific brand
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comparative advertising
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a form of advertising that compares two or more specifically named or shown competing brands on one or more specific attributes
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advertising campaign
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a series of related advertisements focusing on a common theme, slogan, and set of advertising appeals
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advertising objective
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a specific communication task that a campaign should accomplish for a specified target audience during a specified period
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advertising appeal
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a reason for a person to buy a product
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unique selling proposition
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a desirable, exclusive, and believable advertising appeal selected as the theme for a campaign
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medium
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the channel used to convey a message to a target market
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media planning
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the series of decisions advertisers make regarding the selection and use of media, allowing the marketer to optimally and cost effectively communicate the message to the target audience
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cooperative advertising
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an arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand
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infomercial
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a thirty minute or longer advertisement that looks more like a television talk show than a sales pitch
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advergamging
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placing advertising messages in web-based, mobile, console, or handheld video games to advertise or promote a product, to advertise or promote a product, service, organization, or issue
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media mix
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the combination of media to be used for a promotional campaign
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cost per contact (cost per thousand or CPM)
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the cost of reaching one member of the target market
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cost per click
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the cost associated with a consumer clicking on a display or banner ad
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reach
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the number of target consumers exposed to a commercial at least once during a specific period, usually four weeks
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frequency
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the number of times an individual is exposed to a given message during a specific period
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audience selectivity
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the ability of an advertising medium to reach a precisely defined market
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medial schedule
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designation of the media, the specific publications or programs, and the insertion dates of advertising
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continuous media schedule
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a media scheduling strategy in which advertising is run steadily throughout the advertising period; used for products in the later stages of the product like cycle
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flighted media schedule
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a media scheduling strategy in which ads are run heavily every other month or every two weeks to achieve a greater impact with an increased frequency and reach at those times
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pushing media schedule
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a media scheduling strategy that uses continuous scheduling through the year coupled with a flighted schedule during the best sales period
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seasonal media schedule
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a media scheduling strategy that runs advertising only during the time of the year when the product is most likely to be used
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product placement
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a public relations strategy that involves getting a product, service, or company name to appear in a movie, television show, radio program, magazine, newspaper, video game, vide or audio clip, book, or commercial for another product, on the internet; or at special events
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sponsorship
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a public relations strategy in which a company spends money to support an issue, cause, or event that is consistent with corporate objectives, such as improving brand awareness or enhancing corporate image
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crisis management
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a coordinated effort to handle all the effects of unfavorable publicity or another unexpected unfavorable event
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trade sales promotion
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promotion activities directed to members of the marketing channel, such as wholesalers and relationers
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trade allowance
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a price reduction offered by manufactures to intermediaries such as wholesalers and retailers
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push money
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money offered to channel intermediaries to encourage them to “push” products that is, to encourage other members of the channel to sell the products
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coupon
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a certificate that entitles consumers to an immediate price reduction when the product is purchased
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rebate
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a cash refund given for the purchase of a product during a specific period
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premium
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an extra item offered to the consumer, usually in exchange for some proof of purchase of the promoted product
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loyalty marketing program
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a promotional program designed to build long term mutually beneficial relationships between a company and its key customers
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frequent buyer program
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a loyalty program in which loyal consumers are rewarded for making multiple purchased of a particular good or service
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sampling
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a promotional program that allows the consumer the opportunity to try a product or service for free
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point of purchase (P-O-P) display
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a promotional display set up at the retailer’s location to build traffic, advertise the product, or induce impulse buying
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relationship selling (consultative selling)
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a sales practice that involves building, maintaining, and enhancing the interactions with customers in order to develop long term satisfaction through mutually beneficial patnership
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customer centric
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a philosophy under which the company customizes its product and service offering based on data generated through interaction between the customer and the company
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learning
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an informal process of collecting customer data through customer comments and feedback on product or service performance
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knowledge management
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the process by which customer information centralized and shared in order to enhance the relationship between customers and the organization
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interaction
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the point at which a customer and a company representative exchange information and develop learning relationships
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touch points
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areas of a business where customers have contract with the company and data might be gathered
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point of sale interactions
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a touch point in stores or information kiosks that uses software to enable customers to easily provide information about themselves without feeling violated
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campaign management
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developing product or service offerings customized for the appropriate customer segment and the pricing and communicating these offerings for the purpose of enhancing customer relationships
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sales process (scales cycle)
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the set of steps a sales person goes through in a particular organization to sell a particular product or service
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lead generation (prospecting)
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identification of those firms and people most likely to buy the seller’s offerings
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referral
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a recommendation to a sale person from a customer or business associate
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networking
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a process of finding out about potential clients from friends, business contacts, coworkers, acquaintances, and fellow members in professional and civic organization
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cold calling
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a form of lead generation in which the sale person approaches potential buyers without any prior knowledge of the prospects needs or financial status
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lead qualification
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determination of a sales prospect’s (1) recognized need, (2) buying power, and (3) receptivity and accessibility
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preapproach
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a process that describes the “homework” that must be done by a sale person before he or she contacts a prospect
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needs assessment
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a determination of the customer’s specific needs and wants and the range of options the customers has for satisfying them
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sales proposal
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a formal written document or professional presentation that outlines how the sales person’s product or service will meet or exceed the prospect needs
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sales presentation
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a formal meeting in which the sale person present’s a sales proposal to a prospective buyer
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negotation
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the process during which both the sale person and the prospect offer special concessions in a attempt to arrive at a sales agreement
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follow up
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the final step of the selling process, in which the sales person ensures delivery schedules and met, goods or services perform as promised, and the buyer’s employees are properly trained to use the products
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quota
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a statement of the sale person’s sales goals usually based on the sales volume
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social media
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any tool or service that uses the internet to facilitate conversations
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social commerce
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a subset of e-commerce that involves the interaction and user contribution aspect of social online media to assist online buying and selling of products and services
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crowdsourcing
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using consumer to develop and market products
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social media monitoring
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the process of identifying and assessing what is being said about a company, individual product or brand
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blog
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a publicly accessible web page that functions as an interactive journal, whereby readers can post comments on the author’s entries
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corporate blogs
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blogs that are sponsored by a company or one of its brands and maintained by one or more of the company’s employees
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non-corporate blogs
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independent blogs that are not associated with the marketing efforts of any particular company or brand
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microblogs
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blogs with strict post length limits
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social networking sites
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web sites that allow individuals to connect or network with friends, peers, and business associates
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media sharing sites
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web sites that allow user to upload and distribute multimedia content like videos and photos
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social news sites
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web sites that allow users to decide which content is promoted on a given web site by voting that content up or down
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location based social networking sites
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web sites that combine the fun of social networking with the utility of location-based GPS technology
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review sites
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web sites that allow consumers to post, read, rate, and comment on opinions regarding all kinds of products and services
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price
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that which is given up in an exchange to acquire a good or service
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revenue
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the price charged to customers multiplied by the number of units sold
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profit
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revenue minus expensives
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return on investment (ROI)
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not profit after taxes divided by total assets
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market share
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a company’s product sales as a percentage of total sales for that industry
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status quo pricing
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a pricing objective that maintains existing prices or meets the competition prices
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demand
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the quantity of a product that will be sold in the market at various prices for a specified period
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supply
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the quantity of a product that will be offered to the market by a supplier at various prices for a specified period
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price equilibrium
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the price at which demand and supply are equal
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elasticity of demand
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consumers responsiveness or sensitivity to changes in price
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elastic demand
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a situation in which consumer demand is sensitive to changes in price
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inelastic demand
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a situation in which an increase or a decrease in price will not significantly affect demand for the product
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unitary elasticity
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a situation in which total revenue remains the same when prices change
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dynamic pricing
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a strategy whereby prices are adjusted over time to maximize a company’s revenues
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yield management systems (YMS)
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a technique for adjusting prices that uses complex mathematical software to profitability fill unused capacity by discounting early purchases, limiting early purchases, limiting early sales at these discounted prices, and overbooking capacity
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variable cost
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a cost that varies with changes in the level of output
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fixed cost
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a cost that does not change as output is increased or decreased
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average variable cost (AVC)
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total variable costs divided by quantity of output
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average total cost (ATC)
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total costs divided by quantity of output
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average fixed cost (AFC)
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total fixed costs divided by quantity of output
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marginal costs (MC)
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the change in total costs associated with a one unit change in output
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markup pricing
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the cost of buying the product from the producer, plus amount for profit and for expenses not otherwise accounted for
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keystoning
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the practice of marking up prices by 100%, or doubling the cost
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marginal revenue (MR)
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the extra revenue associated with selling an extra unit of output or the change in total revenue with a one unit change output
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break-even anaylsis
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a method of determining what sales volume must be reached before total revenue equals total costs
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selling against the brand
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stocking well known branded items at high prices in order to sell store brands at discounted prices
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extranet
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a private electronic network that links a company with its suppliers and customers
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prestige pricing
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charging a high price to help promote a high quality image
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price strategy
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a basic, long term pricing framework that establishes the initial price for a product and the intended direction for price movements over the product life cycle
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price skimming
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a pricing policy whereby a firm changes a high introductory price, often coupled with heavy promotion
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penetration pricing
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a pricing policy whereby a firm changes a relatively low price for a product initially as a way to reach the mass market
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unfair trade practice acts
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laws that prohibit wholesales and retailers from selling below cost
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pricing fixing
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an agreement between two or more firms on the price they will change for a product
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predatory pricing
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the practice of changing a very low price for a product with the intent of driving competitors out of business or out of a market
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base price
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the general price level at which the company expects to sell the good or service
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quantity discount
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a price reduction offered to buyers buying in multiple units or above a specified dollar amount
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cumulative quantity discount
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a deduction from list price that applies to the buyer’s total purchases made during a specified period
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noncumulative quantity discount
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a deduction from list price that applies to a single order rather than to the total volume of orders placed during a certain period
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cash discounts
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a price reduction offered to a consumer, an industrial user, or a marketing intermediary in return for prompt payment of a bill
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functional discount (trade discount)
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a discount to wholesalers and retailers for performing channel functions
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seasonal discount
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a price reduction for buying merchandise out of season
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promotional allowance (trade allowance)
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a payment to a dealer for promoting the manufacture’s products
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value-based pricing
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setting the price at a level that seems to the customer to be a good price compared to the prices of other options
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FOB origin pricing
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a price tactic that requires the buyer to absorb the freight costs from the shipping point (“free on board”)
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uniform delivered pricing
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a price tactic in which the sellers pay the actual freight charges and bills every purchaser an identical, flat freight charge
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zone pricing
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a modification of uniform delivered pricing that divides the united states for the total market into segments or zones and charges a flat freight rate to all customers in a given zone
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freight absorption pricing
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a price tactic in which the seller pays all or part of the actual freight charges and does not pass them on to the buyer
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basing point pricing
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a price tactic that charges freight from a given (basing) point, regardless of the city from which the goods are shipped
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single price tactic
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a price tactic that offers all goods and services at the same price for perhaps two or three prices
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flexible pricing (variable pricing)
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a price tactic in which different customers pay different prices for essentially the same merchandise brought in equal quantities
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price lining
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the practice of offering a product line with several items at specific price points
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leader pricing (loss leader pricing)
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a price tactic in which a product is sold near or even below cost in the hope that shoppers will buy other items once they are in the store
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bait pricing
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a price tactic that tries to get consumers into a store through false or misleading price advertising and then uses high pressure selling to persuade consumers to buy more expensive merchandise
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odd even pricing (psychological pricing)
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a price tactic that uses odd numbered prices to connote bargains and even numbered prices to imply quality
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price bundling
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marketing two or more products in a single package for a special price
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unbundiling
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reducing the bundle of services that comes with the basic product
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two part pricing
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a price tactic that charges two seperate amounts to consume a single good or service
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consumer penalty
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an extra fee paid by the consumer for violating the terms of the purchase agreement
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product line pricing
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setting prices for an entire line of products
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joint costs
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costs that are shared in the manufacturing and marketing of several products in a product line
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delayed quatation pricing
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a price tactic used for industrial installations and many accessory items in which a firm price is not set until the item is either finished or delivered
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escalator pricing
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a price tactic in which the final selling price reflects cost increases incurred between the time the order is placed and the time delivery is made
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price shading
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the use of discounts by sales people to increase demand for one or more products in a line